New data suggests nearly two-thirds of homes listed in the UK since January remain unsold due to high mortgage rates deterring buyers, with some sellers refusing to budge on their asking prices. The figures from property portal Zoopla highlight a slowdown in the market, which has seen agreed sales fall 7% below last year's levels.
The East Midlands and Wales have been particularly affected, with sales declining by 12% and 11% respectively. However, areas like northern England and Scotland have experienced less of an impact due to fewer homes being put on the market and smaller increases in mortgage costs for buyers.
First-time buyers are shouldering the brunt of these higher borrowing costs, which saw a notable surge in April following global financial shifts. This added an average of £125 extra per month to typical mortgage repayments compared to January, with London's first-time buyers facing even greater hardship at a peak increase of £232 monthly.
A 15% drop in buyer demand across the UK over the past year has been attributed to these rising rates, according to Zoopla. This decline is most pronounced in smaller property markets; two-thirds of one and two-bedroom flats listed this year are currently unsold, whereas sales for larger properties remain relatively stable.
Despite the challenging conditions, industry experts see some hope on the horizon. Richard Donnell, executive director at Zoopla, notes recent cuts in mortgage rates as a positive sign. He points out that correctly priced homes continue to sell and buyers now have more choice and potentially more room for negotiation with motivated sellers.
The Bank of England's report of falling mortgage approvals in May – reaching a two-and-a-half-year low – reflects the immediate impact of rate increases and deals being withdrawn from the market. Estate agents also report that supply now generally exceeds demand, creating an environment where sellers may need to adjust their pricing expectations.